As part of their report, the professors highlight 5 major missteps groups take when trying to assess or enter China’s middle market:

1. Managers use their existing customer segmentation and transfer it to the Chinese market.
2. Managers fail to continually update their understanding of the Chinese mid-market
3. Managers assume that because mid-market consumers canít afford top quality merchandise therefore they will accept products and service that arenít customized
4. Managers overestimate the willingness of mid-market customers to pay a premium for international brands over locally made equivalents.
5. Managers assume that mid-market growth is concentrated in the first and second tier cities such as Beijing, Shanghai and Xian and that the third and fourth tier cities are restricted to the low-end market and do not experience accelerated market growth

Key factors for formulating the product strategy appear to be up-to-date market analysis, early market entry and moderate prices.

Setting up separate organizational units targeting the mid-market is the key factor for implementing the product strategy.

Localizing research and development, and adjusting manufacturing processes seem to present both major challenges and the key to success for the separate organizational unit.

Only if domestic companies have already achieved reliable and constant product and service quality should they undertake the adventure towards the mid-market segment.

A market entry that is too early and too ambitious can put the company at risk.

The report, while brief (email me for a copy), highlights some critical factors that firms should certainly consider ( there are certainly others that are firm/ industry/ product specific), but on a larger level where I liked this study/ report was that it had the potential to open smart dialogue.

Dear Richard, I’m a PhD student in Uppsala University on my last year (on the 5th). I am doing research on a western MNC’s entry into the mid end segment in China for mining equipment. Your research sounds very interesting and I would really appreciate a full version of your report.
Best regards, Mikael Eriksson